Ed Miliband pledges big pay rise for Britain’s poorest workers

Ed Miliband pledges big pay rise for Britain’s poorest workers

Labour leader says he would raise minimum wage to £8 by 2020 in move that ‘reveals core party values’.

Labour would significantly boost the national minimum wage to more than £8 an hour during the next parliament, giving many of Britain’s lowest paid workers an increase of about £60 a week, Ed Miliband has announced.

The plan, revealed in an interview with the Observer on the eve of Labour’s annual conference in Manchester, would see the minimum wage climb by at least £1.50 an hour from £6.50 an hour (the rate from 1 October this year) by 2020. The substantial rise would throw down the gauntlet to the Conservative party on low pay, as Miliband prepares to fight next May’s general election on a platform of raising living standards for the less well-off.

Miliband says the rise, which would be implemented in stages by the Low Pay Commission in consultation with business, is part of Labour’s plan to ensure that hard-working people gain better rewards, and more of the proceeds of economic growth.

The flagship policy reflects Labour’s belief that the benefits of economic recovery have failed to cut through to significant swaths of the population and it will be accompanied by a commitment to promote the living wage through public procurement contracts.

One in five UK workers – more than five million people – are categorised as being on low pay, defined as wages of less than £7.71 an hour, or two-thirds of the hourly median wage of £11.56.

Under Labour’s proposals – a key plank of its manifesto for government – the minimum wage would increase from 54% to 58% of median earnings by 2020 and then 60% in the following parliament. Miliband said the announcement underlined his commitment to build an economy that rewards all hardworking people, not just the wealthiest at the top.

“It is about values,” Miliband says. “It is about saying that this country does not work for millions of working people and we are going to change it. It is not business as usual. It is a proper plan for your future.”

Asked whether he felt able to give any credit to the chancellor, George Osborne, and the coalition for restoring the economy to growth, Miliband refused to do so, saying that growth had stalled for three years, having been growing at the last election.

The coalition had also failed to prevent a dramatic fall in living standards, the Labour leader said.

“Their record is perhaps one of the worst ever in terms of the longest fall in living standards, wages falling, wages rising slower than prices – and this isn’t an accident. This is what a Tory economy is like,” he said.

By setting out a policy for the long term, Labour says businesses will have time to plan and adapt to boost productivity and support higher wages.

Miliband will argue that international evidence shows that countries can support minimum wages at this level with no adverse impact on employment.

The move would give this country a minimum wage similar to those in Australia and European Union countries such as Belgium and Germany, but would still be lower than in France and New Zealand.

Under the plan the Low Pay Commission will be given powers to advise the secretary of state for business, innovation and skills if, in the face of economic shocks, the goal cannot be met without risking jobs and economic growth.

Addressing Labour activists in Manchester on Saturday, Miliband set out plans to ensure the construction of 200,000 homes a year. Drawing on lessons from the success of the 2012 Olympics, where a specific site was identified and then developed on time and on budget, all communities will have similar powers at their disposal as part of an extended devolution to English local government and its city and county regions.

A network of “new homes corporations” will be accountable to their communities and will work closely with private sector partners and housing associations to deliver more ambitious home building projects.

Miliband said: “The last few months have been about keeping our country together. The next eight months are about how we change our country together. And we know that yearning for change is there right across our country. Constitutional change matters, but we know that something else matters even more: this country doesn’t work for most working people and we, the Labour party, are going to change it.”

A Conservative spokesman said: “This is just an empty promise from Ed Miliband. The last Labour government also promised to build over 200,000 homes a year – but in reality housebuilding collapsed to its lowest level since the 1920s. Labour left our housing market and economy on its knees – and would do it all over again.”

  • The Observer,

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